The government of South Korea is bringing new regulatory implications to the crypto sector. As per the latest regulatory changes, the Bank of Korea or the Central Bank of the sovereign nation is appointed as the main regulatory authority over the local crypto sector. The parliament of ROK recently passed the Virtual Asset Protection Act this week.
The final vote on the bill was cast during a plenary gathering. Under the new legislation, market manipulation is prohibited. At the same time, the bill also provides provisions for cracking down on illegal practices like insider trading or undeclared trading details.
Anyone found in violation of these regulatory requirements can face legal penalties twice as much as their total crypto trading profits. In this case, it will mean that the threat actors are generating profits or avoiding losses through unfair malicious practices such as undisclosed information and insider trading, etc.
Meanwhile, Financial Services Commission is now heading the crypto service providers and custodial operators. At the same time, the new regulations have mandated virtual asset issuers to be insured to combat the threat of hacking.
Crypto Entities in South Korea to Get Insurance to Protect Consumers
By the decree of the Virtual Asset Protection Act in South Korea, crypto entities are bound to get insured to avoid threats like hack attacks. At the same time, the digital asset entities are directed by the Central Bank to keep detailed records of all transactions and share them with the main assessor.
In this manner, the Bank of Korea will reserve the power to investigate virtual asset enterprises. There is another bill in the works that will impact crypto market activities in the region. The second bill concerning cryptocurrency was passed in May this year.
This second bill mandated public servants in the country to disclose their cryptocurrency holdings before assuming office. Recently, local politician Kim Nam-Kuk made headlines for getting in trouble with the regulators. He is currently under investigation by his party members on the matter of owning undeclared wemix coins valued at $4.5 million.
The politician has suspected of having several undisclosed positions in crypto. The scandal has led to his resignation while authorities are probing into Upbit and Bithumb exchange wallet addresses.
Another important person of interest currently at large in South Korea is Do Kwon. The founder of the popular cryptocurrency project Terra Luna has now become a controversial figure in the community.
Following the collapse of the algorithmic stablecoin Terra, Kwon has been on the run from the authorities. He is currently facing 4-months in jail in Montenegro for fake passport. He is also pursued by several bigwigs who have sustained massive losses on account of their investment in the Terra Luna project.
There are a host of crypto giants such as Celsius, Three Arrow Capital, and Voyager that were imposed to file for bankruptcy due to their big losses after Terra’s collapse.
The founders of Three Arrow Capital have recently made a comeback in the crypto sector with a new Venture fund called 3AC Ventures by partnering with OPNX. However, the venture fund has received considerable criticism from the crypto community on account of its previous track record.